Memorandum

City of Lawrence

City Manager’s Office

TO:	Dave Corliss, City Manager
FROM:	Brandon McGuire, Assistant to the City Manager
CC:	Diane Stoddard, Casey Toomay, Toni Wheeler, Scott Wagner
DATE:	June 25, 2014
RE:	Option to purchase land at 947 New Hampshire

Background

In September, 2000, the City entered an agreement to lease the City owned land at 947 New Hampshire to 9-10, L.C. with an option for the Developer to purchase the land.  As part of the Downtown 2000 TIF District, 9-10, L.C. developed the existing four story mixed use building on the City owned land.  Pursuant to the agreement, the Developer recently informed the City of its intent to exercise its option to purchase the land.  The selling price is $173,415.23, as determined by the formula dictated in the land lease agreement.  The property’s inclusion in the Downtown 2000 TIF District will not change as a result of the sale.  The attached map outlines the property and TIF district.               

Lease and Development Agreements

In connection to construction of the parking garage and the redevelopment agreement as part of the Downtown 2000 TIF project, the lease agreement establishes that the land at 947 New Hampshire be leased to 9-10, L.C. for the purpose of developing the land.  Appraised improvements to the land total $1.55 million in residential use and $1.17 million in commercial use, for a total of $2.73 million in improvements.  The developer has fulfilled the terms of the land lease agreement and the development agreement including paying property taxes. 

Transfer of Property

Pursuant to the agreement, the City shall convey marketable title upon exercise of the purchase option by the Developer and shall bear the cost of title insurance.  The City and the Developer will evenly split the closing costs.

Staff Recommendation

Staff recommends finalizing the transfer of the property to the Developer pursuant to the terms of the land lease and at the agreed upon price of $173,415.23.  If so directed, the City Attorney’s Office will assist with conveyance of the land and will coordinate closing with a local title company.  Bond counsel has reviewed the recommended action for compliance with bond covenants related to the Downtown 2000 TIF redevelopment project.  Proceeds from the sale are recommended to be used for debt service related to the parking garage on New Hampshire Street. 

Action

Authorize the Mayor to sign all appropriate documents required to enable the sale and transfer of title for city lot 91 and the south 25 feet of lot 89 on New Hampshire Street, commonly known as 947 New Hampshire to 9-10, L.C. and to amend any development agreements if needed to affect such transfer.